As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the real estate services industry, including Marcus & Millichap (NYSE:MMI) and its peers.
Technology has been a double-edged sword in real estate services. On the one hand, internet listings are effective at disseminating information far and wide, casting a wide net for buyers and sellers to increase the chances of transactions. On the other hand, digitization in the real estate market could potentially disintermediate key players like agents who use information asymmetries to their advantage.
The 12 real estate services stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was 0.9% above.
Luckily, real estate services stocks have performed well with share prices up 45.8% on average since the latest earnings results.
Marcus & Millichap (NYSE:MMI)
Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.
Marcus & Millichap reported revenues of $172.3 million, up 8.8% year on year. This print exceeded analysts’ expectations by 5.3%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EBITDA estimates.
“Our second-quarter results reflect the resilience and adaptability of our platform during a period of continued global market volatility and tariff-related uncertainty,” said Hessam Nadji, President and Chief Executive Officer of Marcus & Millichap.
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $32.50.
Is now the time to buy Marcus & Millichap? Access our full analysis of the earnings results here, it’s free.
Best Q2: The Real Brokerage (NASDAQ:REAX)
Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ:REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.
The Real Brokerage reported revenues of $540.7 million, up 58.7% year on year, outperforming analysts’ expectations by 12.1%. The business had a stunning quarter with EPS in line with analysts’ estimates and a solid beat of analysts’ EBITDA estimates.
The Real Brokerage achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 24.2% since reporting. It currently trades at $5.10.
Is now the time to buy The Real Brokerage? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: eXp World (NASDAQ:EXPI)
Founded in 2009, eXp World (NASDAQ:EXPI) is a real estate company known for its virtual, cloud-based approach to real estate brokerage.
eXp World reported revenues of $1.31 billion, up 1.1% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 2.5% since the results and currently trades at $11.11.
Read our full analysis of eXp World’s results here.
Opendoor (NASDAQ:OPEN)
Founded by real estate guru Eric Wu, Opendoor (NASDAQ:OPEN) offers a technology-driven, convenient, and streamlined process to buy and sell homes.
Opendoor reported revenues of $1.57 billion, up 3.7% year on year. This number beat analysts’ expectations by 4.2%. Aside from that, it was a mixed quarter as it also recorded EPS in line with analysts’ estimates but .
The stock is up 142% since reporting and currently trades at $6.13.
Read our full, actionable report on Opendoor here, it’s free.
Zillow (NASDAQ:ZG)
Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ:ZG) is the leading U.S. online real estate marketplace.
Zillow reported revenues of $655 million, up 14.5% year on year. This result surpassed analysts’ expectations by 1.2%. More broadly, it was a satisfactory quarter as it also produced a solid beat of analysts’ adjusted operating income estimates but a significant miss of analysts’ EPS estimates.
The stock is up 3.9% since reporting and currently trades at $84.70.
Read our full, actionable report on Zillow here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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